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Comment of the Day: How the Other Half Will Earn a Living

COMMENT OF THE DAY: HOW THE OTHER HALF WILL EARN A LIVING “I really don’t care for any of the businesses coming in or their business models, but I’m really happy about the hundreds of jobs that will be created once they’re here. If these are the only companies with the capital to expand these days, well, that’s unfortunate, but at least someone‘s growing. That’s where most of the people—the ones that can’t afford the Rice Military townhouses, anyway—on this side of I-10—you know, the non-Heights side—work to feed their families and pay bills, etc., or where all the kids being raised over here will get their first job. Not everyone can work at Wabash or the comic book store.” [Jason C., commenting on Where the Walmart Golden Arches Will Rise]

23 Comment

This house is truly something incredible. The amount of time and energy to craft together something so unique to bring this neighborhood a fresh and modern look is something to be recognized with praise. Also I would like to show my appreciation to the culture that this house brings to the neighborhood. The new homeowner will be more than proud to call this place home sweet home!

This is the coolest looking house. I could live outdoors at this place. So love how updated it is, but also has a warm comfy feel. Love the woodwork indoors and out. How about the terrific porch? Wish I could buy it. Mybe one day I could build a replica. Lucky whoever gets to live in it.

# Jason: Re: comment of the day. Some of these self-important Heightsters(and their brethren in other neighborhoods) think they’re the be all & end all arbiters of the whole world.They’re NOT.They’re full of crap and they KNOW it. They’re pissed because they DO NOT have the serious kind of money to live in Memorial,Tanglewood or River Oaks. Just ignore them.They’ll secretly be shopping at the very places they criticize!!!

This is the coolest looking walmart. I could live outdoors at this Walmart. So love how updated it is, but also has a warm comfy feel. Love the woodwork indoors and out. How about the terrific porch? Wish I could buy it. Maybe one day I could build a replica Walmart. Lucky whoever gets to live in Walmart.

Spoonman: Economics is a great science that makes people sound smart until they are forced to apply their theories in the real world. There is no comparative advantage with China. China inflates its currency and places all kinds of barriers to keep out US exports (not to mention a complete lawlessness when it comes to intellectual property). Chinese companies also sell their products at or below cost domestially in order to internally subsidize their low wage production, making it completely impossible for US companies (and workers) to compete. The result is a massive trade deficit, a huge accumulation of US currency in China and a massive loss of jobs to China (2.7 million between 2001 and 2011). Chinese workers have no right to organize. China has a vast supply of displaced rural citizens who are willing to work for nothing, keeping the wider Chinese workforce from seeing any upward mobility. There is no comparative advantage with China, just labor arbitrage and absolute advantage for Chinese producers. And lets not forget that China is a communist country that is a major road block in trying to resolve the conflicts in Iran, Syria and N. Korea. Applying Econ 101 concepts without any analysis of the actual facts is beyond ignorant and dangerous.

Let’s hear your counterpoint, Spoonman. I know lots of people who think like you, and none of them can properly explain your rationale. Globalism has eaten our production jobs, and Wal-Mart has played a huge part in it. Now we should have an economy based on advertising and backrubs, and continue to send our wealth overseas in exchange for the material goods of life?

A merchant, one of my friends, having had two business transactions, with very different results, I have been curious to compare on this subject the accounts of the counter with those of the custom-house, interpreted by Mr. Lestiboudois with the sanction of our six hundred legislators.

Mr. T … despatched from Havre a vessel, freighted, for the United States, with French merchandise, principally Parisian articles, valued at 200,000 francs. Such was the amount entered at the custom-house. The cargo, on its arrival at New Orleans, had paid ten per cent. expenses, and was liable to thirty per cent. duties; which raised its value to 280,000 francs. It was sold at twenty per cent. profit on its original value, which being 40,000 francs, the price of sale was 320,000 francs, which the assignee converted into cotton. This cotton, again, had to pay for expenses of transportation, insurance, commissions, etc., ten per cent.: so that when the return cargo arrived at Havre, its value had risen to 352,000 francs, and it was thus entered at the custom-house. Finally, Mr. T … realized again on this return cargo twenty per cent. profits; amounting to 70,400 francs. The cotton thus sold for the sum of 422,400 francs.

If Mr. Lestiboudois requires it, I will send him an extract from the books of Mr. T … He will there see, credited to the account of profit and loss, that is to say, set down as gained, two sums; the one of 40,000, the other of 70,000 francs, and Mr. T … feels perfectly certain that as regards these, there is no mistake in his accounts.

Now what conclusion does Mr. Lestiboudois draw from the sums entered into the custom-house, in this operation? He thence learns that France has exported 200,000 francs, and imported 352,000; from whence the honorable deputy concludes “that she has spent, dissipated the profits of her previous savings; that she is impoverishing herself and progressing to her ruin; and that she has squandered on a foreign nation 152,000 francs of her capital.”

Some time after this transaction, Mr. T … despatched another vessel, again freighted with domestic produce, to the amount of 200,000 francs. But the vessel foundered after leaving the port, and Mr. T … had only farther to inscribe on his books two little items, thus worded:

“Sundries due to X, 200,000 francs, for purchase of divers articles despatched by vessel N.

“Profit and loss due to sundries, 200,000 francs, for final and total loss of cargo.”

In the meantime the custom-house inscribed 200,000 francs upon its list of exportations, and as there can of course be nothing to balance this entry on the list of importations, it hence follows that Mr. Lestiboudois and the Chamber must see in this wreck a clear profit to France of 200,000 francs.

We may draw hence yet another conclusion, viz.: that according to the Balance of Trade theory, France has an exceedingly simple manner of constantly doubling her capital. It is only necessary, to accomplish this, that she should, after entering into the custom-house her articles for exportation, cause them to be thrown into the sea. By this course, her exportations can speedily be made to equal her capital; importations will be nothing, and our gain will be, all which the ocean will have swallowed up.

Bastiat thus pretty cleanly demonstrates the absurdity of concerning oneself with balance of trade. A simpler demonstration is to ask yourself if Michigan could solve its economic difficulties by closing its borders and stopping trade with states like Alabama, whose right-to-work environment has drawn away some manufacturing jobs.

That’s absurd, so how would it help the United States?

But Bastiat didn’t have to deal with the silly concern that trade “exports jobs”.

As Thomas Sowell says, the first rule of economics is scarcity: there is never enough of anything to satisfy everybody’s wants for it. So it seems that it should be pretty hard for people to be unemployed – there’s never enough of labor to satisfy all our wants.

But the government comes in and makes it harder for people to get what they want. Partially this pushes some markets, like marijuana, into the less-profitable and more-deathy black market. Partially it makes it hard for people, especially the disadvantaged, to respond to demand by moving into new markets. Government programs like Jim Crow and licensing requirements for things like interior decorating are good examples of this.

But the market could, ideally, adjust to these circumstances. But it’s always playing catchup. No matter what people claim about GWB, his adminsitration increased regulations at a record pace, and O has only increased it.

Nobody knows what’s in Dodd-Frank, and only the blind would claim it addresses the causes of the financial crisis (after all, a lot of well-connected people made money from that).

Spoonman: Typical economist BS. A completely overly broad hypothetical used to try to construct an infallible rule that completely ignores real word problems. What about the rampant violation of US intellectual property laws? There is even a bootleg Disney World in China. What about currency manipulation that keeps their exports cheap and our exports expensive? What about Chinese protectionism? What about massive Chinese subsidies of domestic industry? Comparative advantage does not work when one side is not playing by the rules.

On a micro scale, the free market is the obvious answer. It involves individuals making satisfactory agreements between an exchange of goods to both’s benefit. On a macro scale, it would be the same if governments did not monopolize market transactions. China does things that affect macro-economics, but just a smoot-hawley ended up hurting the US, most retaliation schemes against China will do the same. Eventually China will realize it hurts itself with its subsidies and buying up greenbacks (aka currency manipulation), but playing their game won’t help us, ignoring it until they change is the best solution.

The Chinese subsidize their industries to make them competitive internally with US exports. Protectionism has been shown time and time again to be an effective way to grow domestic industry. S. Korea went from a third world war torn impovrished nation following the Korean War into a wealthy, prosperous first world nation thanks to protectionism. The US also developed its domestic industry through protectionism. I hate Disney as much as the next guy, but the entertainment industry is a major component of the US economy. China has no virtually no entertainment industry. When was the last time you heard a Chinese band on the radio? Yet, the Chinese people are voracious consumers of US produced entertainment products but generally do not pay US producers a penny thanks to the complete lack of enforcement of IP laws in China. You cannot have properly functioning competitive advatage when one side is allowed to cheat all the time. In the short run, taking action against China is frightening because we completely rely on them for consumer goods and to finance government debt. But, in the long run, China is just using the US consumer market to build its own industries to eventually be able to dominate all US exports. This is the stated goal of the Chinese communist party. They want to crush the capitalists with a Chinese version of capitalism in order to bring about communism. The latter will not happen, but the former will if nothing changes.

The French – such funny sad clowns.
But the ships that leave our shore for China are empty, so the part about sending their cargo to the bottom of the sea loses something.
Or are they metaphorically filled with our “ideas” and Disney characters?
Is there no point at which loss of knowledge of the manufacturing process might impede Americans’ ability to develop new products?
Thanks for turning me on to Bastiat, though. I love that American libertarians have their own French ideologue. I didn’t know him but had seen the Broken Window fallacy somewhere. I never paid a child a franc to break a window, but let’s say I observed that the child was throwing his ball against the house just where there was a leaky window I wanted to replace, and didn’t discourage him. In the course of events I bypassed the glazier and went for a new, energy-efficient window. It was not a lost opportunity at all.
Read Bastiat’s trifecta aloud to the other person here:
“One of the strangest phenomena of our time … is the doctrine which is founded upon this triple hypothesis: the radical passiveness of mankind, the omnipotence of the law, the infallibility of the legislator.”
Him: “Mankind is totally passive, you f**kwad (I think he was talking to B. there); the law should be omnipotent; and what was the other thing — the infallibility of the — okay, I’ll give him that.”
I apologize. He’s a bit of a paleocon, thinks libertarianism is a crap response to Marxism.